New Requirements Proposed for Underground Storage Tanks as Part of Draft Bulk Storage Regulations

On November 4, 2014, the comment period closed on the New York State Department of Environmental Conservation’s (“NYSDEC’s”) proposed revisions to the Petroleum Bulk Storage (“PBS”) and Chemical Bulk Storage (“CBS”) regulations. The draft rules are intended to clarify and update existing bulk storage regulations as well as align New York with the form and substance of federal regulations. More importantly, the proposed revisions will address inconsistencies between New York’s regulations and the U.S. Environmental Protection Agency’s (“EPA’s”) regulations for Underground Storage Tanks (“UST”), which EPA is currently revising.

NYSDEC’s new PBS regulations would consolidate existing regulations from Parts 612, 613, and 614 into one new Part 613, which would govern aboveground and underground storage tanks, delivery prohibitions, release response and corrective action. While some changes are merely administrative and organizational, major definitional and operational changes will signal stricter requirements for owners and operators.

PBS Program Changes:

Under the proposed regulations, “facility” would be redefined as the property on which the tanks are located, not just the tanks themselves. As such, the property owner would be responsible for tank registration and the tank owner or operator responsible for operation and maintenance of the tanks. Applicable facilities would continue to be defined as those with one or more tank systems with a combined storage capacity greater than 1,100 gallons, and certain USTs greater than 110 gallons. Other definitional changes include clarifications to various concepts of tank capacity (e.g. design capacity, storage capacity, and working capacity) as well as new provisions to define classes of operators for purposes of the new operator training requirement for UST facilities.

The draft rule also incorporates a new delivery prohibition for facilities that are in significant non-compliance (“SNC”). If NYSDEC makes a finding of SNC, the tank or system would be “red-tagged,” thus rendering delivery or acceptance of delivery of product illegal and subject to potential enforcement action. Examples of a basis for an SNC finding include improper corrosion protection, inadequate secondary containment, or failure to conduct leak detection for more than one month.

While existing regulations permit temporary closure of tanks that are out-of-service for thirty (30) days or more, no limit on the length of time a tank can remain out-of-service is currently specified. Under the proposed regulations, tanks or systems that remain out of service for more than twelve (12) months would be required to be permanently closed. For all permanent closures, the revised regulations would establish a new rule that a closure report must be submitted to NYSDEC within ninety (90) days of closure.

UST Revisions:

NYSDEC’s revisions to its UST regulations under the PBS program aim to provide more consistency with EPA’s UST standards implemented at 40 C.F.R. Part 280, “Technical Standards and Corrective Action for Owners and Operators of Underground Storage Tanks.” For facilities subject to both the federal and state UST regulations, such as retail service stations, major changes to New York’s regulations include new state operator training requirements, updates to equipment standards, and stricter spill prevention and leak detection.

New state operator training and certification requirements would be adopted in New York based on the federal requirements. To accomplish this, NYSDEC would give operators one year from the effective date of the final regulations to be certified by NYSDEC or prove certification from a reciprocal state. NYSDEC would develop the training material as well as administer the test, which would be available online and in-person. Public comment on the draft operator training policy, “DER-40 – Operator Training,” closed on November 5, 2014.

Equipment standards would also be revised such that if fifty percent (50%) or more of a pipe run is to be replaced, the entire run would be required to be replaced, unless the piping was constructed in accordance with the new standards. For newly constructed UST tanks and systems, the only acceptable method of secondary containment would be double-walled tank and piping. Under-dispenser containment would also be required for new dispenser systems.

Proposed changes to spill and overfill prevention would include the use of transfer procedures as specified by either the National Fire Protection Association (“NFPA”) or the American Petroleum Institute (“API”), unless those procedures are shown to be technically infeasible by the facility. All UST systems would be required to monitor for leaks on a weekly basis as well as perform monthly operability checks. Retail motor-fuel UST systems will also be required to perform 10-day reconciliations as part of its inventory monitoring.

Path Forward:

These proposed changes are just Phase I of the NYSDEC’s draft revisions. Once EPA has finalized its revisions to the federal UST regulations, NYSDEC will launch Phase 2, which will address financial responsibility, spill response and correction action, and other initiatives as they are adopted by EPA. Phase I of the regulations are expected to be finalized in late spring 2015, or one year from the final hearing. With EPA’s UST regulations scheduled to be finalized in December 2014, expect to see Phase 2 of NYSDEC’s draft PBS regulations in early 2015.

If you require further information regarding the information presented in this Legal Alert and its impact on your organization, please contact Richard R. Capozza, Chair of the Energy Practice Area at (315) 425-2710 or rcapozza@hblaw.com, or Yvonne E. Hennessey, Co-Chair of the Environmental Practice Area at (518) 429-4293 or yhennessey@hblaw.com.